The term BEE, short for BBBEE, or Broad-Based Black Economic Empowerment, is often tossed around in business circles – without a proper understanding of what it is about. BBBEE has become a bit of a bogeyman, with misconceptions, concern and hesitation abounding in discussions about it. But BBBEE is, overall, a very positive social initiative that can benefit everyone – not just, as is often assumed, a small sector of society. Good consulting services can go a long way towards dispelling the myths and confusion that surround the policies, and help you to get the most out of them.
BBBEE policies are set out in the BBBEE Act (No. 53 of 2003) and reinforced by the Codes of Good Practice, which were last revised in 2015. The underlying goal of the legislation has always been to effect positive transformation in the business world and greater society, addressing the legacy of apartheid and empowering greater black economic participation. Contrary to popular belief, it is not compulsory for a business to obtain a BBBEE certificate – it is an entirely voluntary process. However, doing so brings with it a lot of benefits.
For one thing, it means that you and your business are doing your part for transformation – and this can actually be added to your marketing materials, as it creates a good impression. It shows that you care and are committed to change.
Another benefit – in fact, perhaps the biggest benefit, of having a BBBEE certificate is being able to conduct business with the government sector, including municipalities, as well as public entities. A certificate allows a company to tender – opening up new possibilities for work.
A further advantage of having a BBBEE certificate is having a significantly higher chance of securing contracts with large companies, because they are encouraged to do business with smaller BBBEE-compliant companies. A certificate also, crucially, allows you to participate as a supplier in the lucrative chain of preferential procurement.
With all the benefits that a business stands to gain from BBBEE compliance, you might wonder why not everyone is on board. The primary reason is that the legislation can be a bit of a minefield to navigate. The very thought can create stress and be offputting for many companies. The updates to the laws last year made things much stricter and resulted in changes in categories and requirements for the scorecard – all of which can seem intimidatingly complicated.
When calculating the BBBEE scorecard, which comprises eight levels ranked in order of excellence from one downwards, a thorough understanding of the legislative requirements is essential. While small businesses in the form of Exempt Micro Enterprises (EMEs), and, to an extent, Qualifying Small Enterprises (QSEs) – both of which are categorised according to their annual turnover, may not need to provide much in the way of supporting documentation, larger businesses are compelled to show all sorts of items. An audit may be necessary.
To take advantage of the benefits of a BBBEE scorecard in the simplest way possible, and to gain a clear understanding of the legislation and how it all works, BBBEE consulting services are highly recommended. They make the process much easier and hassle-free.